OFAC SANCTIONS THE CENTRAL BANK OF IRAN, THE NATIONAL DEVELOPMENT FUND OF IRAN, ETEMAD TEJARATE PARS CO. AND THE REVOLUTIONARY GUARD OF IRAN
On Friday 20th September 2019, the Office of Foreign Assets Control (OFAC) of the U.S. Treasury Department took action against the Central Bank of Iran (CBI), the National Development Fund of Iran (NDF) and Etemad Tejarate Pars Co. under its anti-terrorist authority, Executive Order (E.O.) 13224. The Central Bank of Iran has provided billions of dollars to the Islamic Revolutionary Guard Corps (IRGC) and its Force in Qods, Iran (IRGC-QF). Iran’s NDF, which is Iran’s sovereign wealth fund and whose board of directors includes the president of Iran, the oil minister and the governor of the Central Bank, has been an important source of foreign exchange and funding for the IRGC-QF and the Ministry of Defence and Logistics of Iran’s Armed Forces (MODAFL). Etemad Tejarate Pars, also designated today, is an Iran-based company used to conceal financial transfers for MODAFL military purchases, including funds from the NDF.
The action is directed at the CBI for its financial support to the IRGC-QF and Hezbollah. In May 2018, OFAC appointed the then Governor of the BCI, Valiollah Seif, and the Deputy Director of the International Department, Ali Tarzali, to facilitate financial transfers for the IRGC-QF and Hezbollah. Furthermore, in November 2018, as part of the Treasury’s disruption of an international oil network for terrorism, OFAC appointed IWC International Department Director Rasul Sajjad and IWC International Department Director Hossein Yaghoobi to carry out financial transactions for the IRGC-QF.
OFAC designates CBI for materially assisting, sponsoring or providing financial, material or technological support, or goods or services to the IRGC-QF and Hezbollah.
The IRGC-QF, which was designated pursuant to Ordinance 13224 of 25 October 2007, is a branch of the IRGC responsible for external operations and has provided material support to numerous terrorist groups, including the Taliban, Hezbollah, HAMAS and Palestinian Islamic Jihad, making it a key component of Iran’s destabilizing regional activities.
Hezbollah was designated by the State Department as a Foreign Terrorist Organization in October 1997, pursuant to Decree 13224 of October 2001. It was also designated in August 2012 pursuant to Decree 13582, which targets the Government of Syria and its supporters.
NATIONAL DEVELOPMENT FUND: AN ILLICIT FUND FOR IRGC-QF AND MODAFL
In accordance with article 84 of the Fifth Development Plan of the Islamic Republic of Iran, the National Development Fund was established to serve the welfare of the Iranian people by allocating revenues from the sale of oil, gas, gas condensate and petroleum products to lasting wealth and productive economic investment. However, the NDF has been used as a black fund for the IRGC-QF, which over the years has received hundreds of millions of dollars in cash disbursements from the NDF.
The NDF, in coordination with the CBI, provided the IRGC-QF with $500 million in 2017 and hundreds of millions of dollars in 2018. In addition, despite an increase in the IRGC’s overall budget for 2019, the Rouhani administration withdrew some $4.8 billion from the NDF in January 2019 to amend the budget allocated to the IRGC and the Islamic Republic of Iran Broadcasting (IRIB).
In early 2019, Etemad Tejarate Pars Co. planned to send tens of millions in various currencies, including euros, to Wilmington General Trading LLC in Dubai, United Arab Emirates, to the Embassy of the Islamic Republic of Iran in Moscow, Russia, and to companies on behalf of MODAFL.
OFAC designates NDF as having materially assisted, sponsored or provided financial, material or technological support, or goods or services to IRGC-QF and MODAFL.
OFAC designates Etemad Tejarate Pars Co. for having materially assisted, sponsored or provided financial, material or technological support, or goods or services to MODAFL.
On 26th March 2019, OFAC designated MODAFL in accordance with O.E. 13224 for its role in assisting the IRGC-QF. Wilmington General Trading LLC was also appointed on 26 March 2019 for being owned or controlled by Asadollah Seifi, who obfuscated millions of dollars in transactions benefiting the Iranian regime and the purchase of foreign exchange for the IRGC.
Iran’s Revolutionary Guard
On September 4th, 2019, the U.S. Treasury Department’s OFAC imposed sanctions on a transportation network that it said was led by Iran’s Revolutionary Guard. It was alleged to have sold millions of barrels of oil for the benefit of Syrian President Bashar al-Assad. This is an unprecedented move against another country’s military, which led Iran to take the same action against U.S. troops in the Middle East.
Sanctions against that powerful organization will result in travel restrictions and possible criminal charges for those who collaborate with the Guardians of the Revolution, something that may affect companies in Europe, because that entity has an important weight in the Iranian economy.
The sanction results in the addition to a “List of Specially Designated Nationals and Blocked Persons” of 16 entities, 10 individuals and 11 vessels suspected of being involved in such activities. Those who intentionally engage in significant transactions for the purchase, acquisition, sale, transportation or marketing of petroleum or petroleum products from Iran are at serious risk of sanctions by the United States, as well as those who provide significant support to a listed Iranian, such as the National Iranian Oil Company (NIOC), the National Iranian Tanker Company (NITC) and the Islamic Republic of Iran Shipping Lines (IRISL).
As a result of the sanctioning actions, all property and interests in the property of these entities that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC. OFAC regulations generally prohibit all transactions of U.S. persons or persons within (or in transit through) the United States involving any property or interest in the property of blocked or designated persons.
In addition, persons who conduct certain transactions with currently designated entities may be exposed to the designation. In addition, any foreign financial institution that knowingly facilitates a material financial transaction or provides material financial services to designated entities in connection with Iran’s support of international terrorism or any Iranian person on OFAC’s List of Specially Designated Nationals and Blocked Persons may be subject to sanctions on behalf of correspondents in the United States or on a guaranteed payment account.
The United States has a big data policy of allowing the sale of agricultural commodities, food, medicines and medical devices, and OFAC will continue to consider requests related to humanitarian trade with Iran, as appropriate.
Source: Office of Foreign Assets Control (OFAC)